Stocks rally on jobs, quarter-end positioning

AT&T, telecom stocks lead gains; ADP jobs data inspires

By

KateGibson

This update corrects spelling of Cantor Fitzgerald.

NEW YORK (MarketWatch) — U.S. stocks rose Wednesday, lifting the Dow Jones Industrial Average to a nearly six-week high, as portfolio repositioning ahead of the quarter’s end added to better sentiment on jobs and deal activity.

After rallying more than 100 points to an intraday high of 12,383.46, the Dow Jones Industrial Average
DJIA, -1.11%
closed up 71.60 points, or 0.6%, at 12,350.61, its highest close since Feb. 18, and the eighth advance in ten sessions.

Giving stocks an early lift, the monthly ADP employment report offered encouragement ahead of Friday’s payroll data from the Labor Department, and telecom stocks extended a monthly advance supported by a landscape-altering deal. At its highs, the Dow Jones industrial was within reach of its June 5, 2008 finish.

One analyst said what’s known as “window dressing” by portfolio managers, an attempt to improve the appearance of quarterly statements by adding to certain investments, also helped.

“The upside pressure on the market is mainly due to the need to reduce cash before the end of the quarter,” said Marc Pado, U.S. equity strategist at Cantor Fitzgerald.

No spring in housing's step

Local revenues are being weighed down by a sluggish housing market. January housing-sales figures ignited fresh fears of a double-dip recession.

After breaking through 1,330, which technicians had pegged as a level of resistance, the Standard & Poor’s 500 Index
SPX, -0.88%
failed to hold above the level as the session neared its close.

The S&P 500 closed up 8.82 points, or 0.7%, at 1,328.26, with telecommunications leading sector gains and technology faring most poorly among its 10 industry groups. For the month that ends Thursday, the telecom sector
GSPLI
has gained 5.2%, easily outpacing the other sectors. Read more about telecom stocks.

On the Dow, AT&T Inc.
T, -0.97%
led advancers among 26 of 30 stocks. The carrier’s shares gained 2.2% after its chief executive said he expects some divestitures of customers and wireless spectrum as the company tries to close its proposed $39 billion acquisition of T-Mobile USA. The deal has energized the telecom sector as investors bet the company and others have more to gain from fewer U.S. mobile carriers. Read more on AT&T's plans to divest some businesses.

Leading gains among the S&P’s 500, Cephalon Inc.’s
CEPH
shares rose 28% to $75.44, above the unsolicited $73-a-share bid offered Tuesday by Canadian drug maker Valeant Pharmaceuticals International Inc.
VRX, -1.37%
(VRX), shares of which rose 13%. Read more about offer for Cephalon.

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